"London has been and will continue to be a very attractive jurisdiction for claims, and [the new legislation] gives additional scope for that," said Edward Coulson of Hausfeld. "The US settlement covers mainly US investors: [but] London is about 40 per cent of the forex market, so there are a lot of other investors."
The other five banks that settled last week are Bank of America, Citi, BNP Paribas, JPMorgan and UBS. A further seven continue to face litigation in the US from investors over alleged foreign exchange manipulation, including Deutsche Bank, Morgan Stanley and Standard Chartered.
David Scott, managing partner of US law firm Scott & Scott, which was also involved in the case, said the settlement with the nine banks went "a long way to ensuring that they are being held accountable for their egregious manipulation of the foreign exchange market".
The US investors alleged that the world's largest financial institutions conspired to manipulate the foreign exchange market as far back as 2003. The conspiracy affected dozens of pairs — the value of one currency versus another — including seven pairs with the highest market volume.
Aside from cases brought by investors, global banks have been hit with penalties from regulators for rate-rigging misconduct. Last November, six banks paid $4.3bn in fines to British and Swiss regulators. The UK's FCA said the forex misconduct was carried on from 2008 until October 15, 2013 — several months into the launch of its probe.
Giles Williams, regulatory partner at accountancy firm KPMG, noted the size of the US settlement was much smaller than the fines imposed by regulators for alleged forex rigging.
"Is therefore the size of some of the regulatory penalties a punishment for behaviour rather than investor loss?" he said.
He said he would be "surprised" if banks had not already made provision for the latest settlement amount.
The banks declined or could not be reached for comment.